U.S. job growth underwhelms in December

Job growth in the U.S. lost further momentum in December, surprising analysts. The Labor Department reported Friday the economy added just 199,000 jobs. That was half of what Wall Street had been expecting.

Economists say the slowdown in job gains was due to a lack of available workers. Still, the report depicts an economy that ended 2021 on a high note, creating a record of nearly 6-and-a-half million jobs last year.

The employment market is rapidly tightening as seen by the jobless rate, which tumbled to a 22-month low of 3.9% even as more people entered the work force. Glassdoor senior economist Daniel Zhao:

“That does really signal that American are finding jobs. This improvement is much more significant than what we saw in payroll growth. That’s a positive sign as we head into the New Year.”

Sectors adding the most jobs: leisure and hospitality, professional services, and manufacturing.

The spike in infections from the Omicron variant likely didn’t impact the report due to the survey’s timing. But the variant’s hit to payrolls will likely be felt in January, so job gains could remain moderate.

Analysts said the report is unlikely to affect the Federal Reserve’s plan to raise interest rates later this year.

But it sent stocks on Wall Street lower in early trading and Treasury yields higher.